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In Depth

The European Commission’s ambition to legislate on software patents has been postponed indefinitely. This became clear after the European Parliament had rejected the Commission proposal by a vast majority. After a debate of more than three years on whether to allow software patenting and under which conditions, the only thing European legislators could agree on was to disagree. Thus, almost all political groups in the Parliament supported the rejection of the proposal, albeit for different reasons. The Commission announced that it would not draft a new proposal and start the process over again. The consequence of this is a legal status quo, where software patentability remains subject to the national administrative practices of the 25 European Union Member States.

Air Transport: European Commission Defends Air Passenger Rights

The European Commission has just launched infringement proceedings against Austria, Belgium, Italy, Luxembourg, Malta and Sweden for failure to meet all their obligations under European Community (EC) Regulation 261/2004. This Regulation, which entered into force on 17 February 2005, affords air passengers greater protection in the event of denied boarding, flight cancellation or long delays. Passengers will be compensated for denied boarding or late cancellation and will receive assistance in the event of long delays. There is no right to compensation for cancellation if the airline can provide evidence of extraordinary circumstances which could not have been avoided. The Regulation applies to all flights, including charters, operated by European airlines from or to a European airport, and to any flight departing from the European Union. Austria, Belgium, Italy, Luxembourg, Malta and Sweden have not yet taken the steps required to establish effective penalties to be imposed on airlines which do not meet their obligations. Luxembourg is also the only country which has not yet set up an independent body responsible for dealing with passengers’ complaints and any disputes they may have with airlines.

Mergers: Commission Approves with Conditions the Acquisition of Swiss by Lufthansa

The European Commission has cleared the proposed acquisition of sole control by the German airline, Deutsche Lufthansa AG, over the Swiss airline, Swiss International Air Lines Ltd, subject to a number of conditions. The Commission found that the consolidation of the two carriers would significantly reduce or even eliminate competition on a number of intra-European routes including Zurich-Frankfurt and Zurich-Munich, and on some long-haul international routes to the United States, Thailand, Egypt and South Africa. To remedy these competition concerns the parties have offered a number of commitments. For instance, Lufthansa and Swiss will have to surrender slots at certain airports, including their main hubs Zurich and Frankfurt. This measure is accompanied by the obligation of Lufthansa not to increase its planned offer on the affected routes. The aim of this undertaking is to allow the emergence of credible competing players on these routes.

Environment: Certain Member States Fail to Implement Biofuels Directive

Philip Bentley QC

Biofuels have an important role to play in European transport and energy policy as one of the few options available for replacing oil-based transport fuels. “They tackle climate change by avoiding emissions of greenhouse gases; they diversify Europe’s sources of energy and reduce dependence on oil imports; and they offer new markets for European agriculture,” said Energy Commissioner Piebalgs when announcing that the European Commission had just sent reasoned opinions to nine Member States for failure to implement Directive 2003/30/EC on the promotion of the use of biofuels and other renewable fuels for transport. Eight Member States have not informed the Commission of measures adopted to transpose the Directive into national legislation, and five have not submitted definitive indicative targets for the share of the petrol and diesel market that should be taken by biofuels by the end of 2005. If these Member States do not comply with the Commission’s reasoned opinion within the prescribed deadline, the matter should be taken before the European Court of Justice. The Commission also considers that the targets set by seven Member States are not in compliance with the Directive’s requirements, and so has addressed letters of formal notice to these States, a preliminary stage to issuing a reasoned opinion.

Energy: Electricity and Gas Markets - Five EU Member States to be Taken Before the Court of Justice

The European Commission has decided to bring before the European Court of Justice five Member States - Estonia, Greece, Ireland, Luxembourg and Spain, for not transposing the Directive on the internal electricity market and/or the Directive on the internal gas market, and to send a reasoned opinion to Portugal with regard to the transposition of the Electricity Directive. The reasoned opinion expresses the Commission’s view that an infringement exists and asks Portugal to remedy the situation within the stated time limit, after the expiry of which the Commission can also bring Portugal before the Court of Justice. The Directives form the basis for the opening up of the electricity and gas markets in the European Union. They have provided freedom of choice of supplier for industrial customers since 1 July 2004 and will do so for domestic customers from 1 July 2007. The Directives combine opening up to competition with maintaining service quality and security of supply. By 1 January 2006 the Commission will publish an overall report on the functioning of the energy market.

Internal Market: Obstacles to Car Imports in Some Member States

The European Commission has taken steps against Austria, Poland and France for infringing rules on free movement of goods regarding car imports. Austria requires unnecessary double checks of the European certificate of conformity (as set out in Directive 70/156/EEC) prior to the importation of cars. Poland appears to impose stricter conditions on the registration of imported second-hand cars than on the re-registration of domestic cars. Finally, the French procedure concerning the registration of vehicles previously registered in another Member State still does not fully comply with Directives 70/156/EEC, 99/37/EC and Article 28 EC Treaty.

Mergers: Joint Venture between BP and Nova Chemicals Approved

The European Commission has cleared the joint venture which combines the polystyrene and expandable polystyrene interests of the English oil company BP and the Canadian company Nova Chemicals. Each of the joint venture partners will contribute their European polystyrene and expandable polystyrene activities to the joint venture. The companies are individually withdrawing from these two sectors so that all their business in these sectors is conducted through the joint venture. The European Commission examined the transaction concluding that it would not significantly impede effective competition in the European Economic Area or any substantial part of it.

NEXT WEEK’S EVENTS

Monday 11 July – Friday 15 July 2005

COUNCIL MEETINGS

Economic and Financial Affairs Council (12 July 2005)

Economic and Financial Affairs Council (Budget) (15 July 2005)

COURT OF JUSTICE

Judgments

Agriculture

C-135/03 Commission v Spain

C-107/04 Comité Andaluz de Agricultura Ecologica

C-370/03 Greece v Commission

C-203/04 Gebrüder Stolle

Approximation of laws

Joined Cases C-154/04, C-155/04 Alliance for Natural Health and Others

Association of the Overseas Countries and Territories

C-40/03 P Rica Foods v Commission

C-41/03 P Rica Foods v Commission

Commercial policy

C-26/00 Netherlands v Commission

C-180/00 Netherlands v Commission

C-452/00 Netherlands v Commission

Coal and Steel

C-57/02 P Acerinox v Commission

Environment and consumers

C-198/03 P Commission v CEVA Santé animale and Others

European citizenship

C-403/03 Schempp

Fisheries policy

C-259/03 Commission v Denmark

C-260/03 Commission v Denmark

C-343/03 Commission v Denmark

Freedom of movement for persons

C-141/04 Peros

C-142/04 Aslanidou

Free movement of goods

C-114/04 Commission v Germany

Intellectual property

C-192/04 Lagardère Active Broadcast

Law governing the institutions

C-304/02 Commission v France

Taxation

C-434/03 Charles and Charles-Tijmens

C-435/03 British American Tobacco International and Newman Shipping & Agency Company